Slowing growth and jihadist threat worry the elite at Davos

20th January 2016, 0 comments

Rising risks to the global economy and a string of jihadist attacks around the world overshadowed Wednesday's opening of an annual meeting of the rich and powerful in a snow-blanketed Swiss ski resort.

The Taliban assault on a university in Pakistan that left at least 21 dead was a jolt to the billionaires, business titans and leaders, including Pakistani Prime Minister Nawaz Sharif, gathering in the Swiss Alpine village of Davos.

The heightened security threat was starkly in evidence in Davos itself, with police carrying machine-guns patrolling the streets and concrete blast blocks positioned in front of key venues.

Fears over the obstacles facing major emerging economies were on everyone's lips at the annual gathering after the International Monetary Fund lowered its outlook for global economic growth this year.

The slowdown in Chinese growth was especially darkening the mood of policymakers after Beijing announced that gross domestic product expanded at its slowest in a quarter of a century last year.

"The big event that I think has captured everyone's attention is the developments in China and in particular the fact that growth is slowing," IHS chief economist Nariman Behravesh told AFP.

The Chinese policymakers have "fumbled", he said. "They have made some mistakes. And they have added to the uncertainty and the volatility by their behaviour."

China's problems will be discussed by the Davos delegates -- "but they won't say it in public, they will say it in the hallways," Behravesh said, noting that "the public Davos is a little different than the private Davos."

That is exactly why 2,500 movers and shakers make their annual pilgrimage here -- to air the biggest issues.

The foreign ministers of two countries deep in conflict -- Saudi Arabia and Iran -- are attending, although a public meeting is considered unlikely.

Business leaders heard Wednesday of the rising threat prosed by cyber attacks.

"These weapons, and they are weapons, are moving towards a level of mass destruction," said James Stavridis, who was NATO supreme allied commander for Europe from 2009-13 and is now dean of the Fletcher School of Law and Diplomacy at Tufts University in the United States.

Stavridis said the world over time would need an international regime to prevent mass cyber attacks, just as it has for nuclear weapons, and he pressed major cyber powers such as the United States, China and Russia to start one-on-one talks to curb the threat.

"We cannot afford to stumble into a cyber cold war but I fear that is where we are headed," he said.

- Migrant furore in focus -

The former military chief warned, too, of heightened tensions in Asia following North Korea's January 6 nuclear test.

"We have a young leader there who is very unstable and it is in the middle of this cauldron of tension between Japan, China, South Korea to some degree, North Korea, " he said. "I see that pot bubbling and I worry about that a great deal."

US Vice President Joe Biden is due to speak later on Wednesday, laying out his vision of the challenges facing the global economy.

The flow of hundreds of thousands of migrants to Europe last year is the other theme running through this year's Davos.

German Vice Chancellor Sigmar Gabriel and Swedish Prime Minister Stefan Lofven will debate Wednesday on how to integrate migrants, at a time when the fallout from the New Year's Eve sex attacks in Cologne threatens Germany's open-armed approach to refugees.

Later in the week, leftist Greek Prime Minister Alexis Tsipras locks horns once again with his bete noire, German Finance Minister Wolfgang Schaeuble.

On Thursday, Argentine President Mauricio Macri will make his first appearance at Davos since his election in November, setting out his case for economic reform in a country with a turbulent recent past.

Also on Thursday, Nigerian President Muhammadu Buhari is expected to face questions about his handling of the Boko Haram insurgency in Africa's most populous country.

Oscar contender Leonardo DiCaprio, a long-time environmental campaigner, used his appearance at Tuesday's opening ceremonies to urge leaders to keep the commitments they made at last year's UN climate talks in Paris to limit global warming and curb fossil fuel use.

"Our planet cannot be saved unless we leave fossil fuels in the ground where they belong. Twenty years ago we described this problem as an addiction, today we possess the means to end this reliance," he said.